I've removed my sidestand switch, so I'm going from memory here, but I believe the motor should cut out if it's put into gear with the side stand down.

Now I can't recall if it's a normally open or normally closed switch.

Try disconnecting the switch and running the bike. If it now runs you've found it. If not, short the connector ends together and try again. Likewise, if it now runs you've found it.

Sounds to me like you have a bad Gear position indicator though, as it should reflect what the bike is actually doing. Has the wire splice been done on the loom you have?
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